Arm and Qualcomm's legal battle may be fizzling out.
Qualcomm seemed to confirm a turning point in the case on Wednesday as both companies released their quarterly earnings reports. Sascha Segan, Senior Manager of Public Relations at Qualcomm, tells Laptop Mag, "Arm recently notified us that it was withdrawing its October 22, 2024 notice of breach and indicated that it has no current plan to terminate the Qualcomm Architecture License Agreement."
Meanwhile, when asked during Arm's quarterly earnings call on Wednesday if the company's ongoing legal battle with Qualcomm would have an impact on revenue, Arm CFO Jason Child firmly insisted, "No impact."
Child went on to explain that Arm's financial forecasts were made with the assumption that "we were not going to prevail in that lawsuit."
He also asserted that, "The primary reason for the lawsuit very much was around defending our IP and that's important, but from a financial perspective, we had assumed we will continue to receive the royalties at basically the same rates that [Qualcomm] have been paying for in the past and will continue to pay."
Qualcomm was optimistic in its own quarterly earnings call on Wednesday, which had the Snapdragon X processors front and center. These are the "Oryon" chips at the heart of Qualcomm's dispute with Arm, which would have been on the chopping block if Arm's bid to end its chip licensing deal with Qualcomm had been successful.
However, while the legal battle is still officially ongoing, it sounds like Arm may be conceding defeat.
Arm's legal battle with Qualcomm explained
Qualcomm and Arm's legal battle centers around claims by Arm that Qualcomm's acquisition of CPU design company Nuvia in 2021 led to both Nuvia and Qualcomm breaching license agreements with Arm. Put simply, it's about intellectual property, which Arm claims Qualcomm stole and utilized in its Oryon CPUs.
This is a major legal battle in the tech industry since it could have far-reaching implications for the future of Qualcomm as well as Nvidia, Microsoft, and even Apple. For Qualcomm in particular, a loss in this legal battle could mean the shuttering of its whole line-up of laptops powered by Snapdragon X Elite, Snapdragon X Plus, and Snapdragon X processors. So, Arm seeming to hint at defeat this week is likely a major relief for Qualcomm.
Arm's earnings call comments also came after a defeat in court back in December, when a jury reached an agreement in Qualcomm's favor on two out of the three claims in Arm's lawsuit.
After the ruling, Qualcomm published a celebratory statement: "We are pleased with today’s decision. The jury has vindicated Qualcomm’s right to innovate and affirmed that all the Qualcomm products at issue in the case are protected by Qualcomm’s contract with ARM. We will continue to develop performance-leading, world-class products that benefit consumers worldwide, with our incredible Oryon ARM-compliant custom CPUs."
The jury's verdict thus far was that Qualcomm did not steal Arm's intellectual property since the Oryon CPUs, which were developed with input from Nuvia's Arm-based chip designs, were covered by an existing license agreement between Qualcomm and Arm. However, Arm's third claim, that Nuvia broke its license with Arm, remains undecided.
The conclusion of this legal showdown is still technically unclear but could be decided next year. That's good news for consumers since it means Snapdragon-powered PCs will continue to be available for purchase for the time being.
